Forex Trading In Review

It is time to see at how the major currencies performed during the past Forex trading week. Were you able to profit from any of last week’s top movers? 

Sterling

The GBP sterling had a mixed start at the beginning of last week which was likely a continuation of last week’s mixed price action. Last Tuesday, the currency got sold off across most boards when the U.K.’s CPI report for the July period was released since headline CPI fell by 0.1% month-on-month in July. This has led to expectations that it would be flat and this was the first negative reading in six months. The year-on-year reading coming up later came fell short of expectation (+2.7%) as it remained at last month’s reading of +2.6%. the core reading, on the other hand, came in at +2.4% year-on-year, a data that has the same annual rate of increase as in June but missed expectations for a 2.5% rise.

Aussie

The AUD made a reversal of fortunes last week as the second worst-performing the week prior, but ended up as this week’s second strongest currency. Australia’s July jobs report was released on Thursday and it didn’t fare well. The jobless rate increased from 5.7% to 5.6%, but that’s only because June’s jobless rate was revised from 5.6% to 5.7%.

Euro

The euro finally tasted the bitter taste of defeat after two strong weeks of trading. The euro initially went lower as an immediate reaction to the not-so-hawkish ECB minutes, although the currency made a quick recovery. When a currency recovers quickly like it did in this case, it means that traders were opening preemptive short positions on the euro ahead of the ECB minutes. Then they used the actual time of the minutes to take profit on those shorts. The price of the euro became messy after that.

Dollar Bulls

The USD was a net winner yet again this week. The price action on the currency isn’t a one-way street though and the greenback barely won when compared to the yen and the Kiwi. At the start of this week, the greenback is struggling to hold on to last weeks gains and has already reversed its wins against most of its major counterparts.

The greenback gained ground on Tuesday when the July headline retail sales were released and it had increased by 0.6%, which is double the projected 0.3% gain. The core reading, on the other hand, increased by 0.5%, which is more than the expected +0.3%.

Forex outlook for the week (Aug 21-25 2017)

Here are the major events for this week.

• US New Home Sales: Wednesday, 14:00, this data will most likely trigger r wider economic activity around infrastructure and are correlated to the wider economy. In the last month’s report, the annualized level of sales went up from 605K to 610K. An increase in a similar figure is expected this time around, 615K.

• UK GDP (second estimate): Thursday, 8:30. The first estimate of UK’s GDP growth for Q2 2017 met the set target 0.3%. It is now expected to be as high though as growth has slowed down significantly in 2017 after a strong 2016.

• US Existing Home Sales: Thursday, Thursday, 14:00. This data has as much importance as the first one. The data was largely disappointing in June coming at 5.53 million annualized. The projected value for July is expected to be 5.57 million.

• Jackson Hole Symposium: Friday 19:00. This key economic gathering in Wyoming has been used to set the stage for significant changes in monetary policy, such as some of the Fed’s QE programs and the ECB’s QE program. Key speeches are anticipated by Fed Chair Janet Yellen and ECB President Mario Draghi.